By Ray Massey
Motorists are struggling with the fastest rises in diesel prices for a decade as the fuel crisis worsens.
With oil soaring in a trading frenzy to a new high of nearly $130 a barrel last night, the stock market fell and Chancellor Alistair Darling pledged international action to beg oil producers to release more supplies.
Diesel is rising even faster than petrol and an increase to an average of 125.4p a litre – or £5.70 a gallon – is crippling motorists and hauliers, with yet more rises to come, the AA reveals today.
A new round of fuel protests is due to start in London next week as critics demand that the Chancellor slash duty. Motoring groups fear the £6 gallon is weeks away as industry experts predict oil will top $150 a barrel.
Yesterday the world’s biggest oil producer Saudi Arabia was celebrating 75 years of its national oil company but showed no signs of releasing more supplies despite a request from President Bush.
Saudi oil minister Ali al-Naimi stated the ‘kingdom’s view that the currently produced quantities meet market needs and that the production capacity can meet any additional energy needs.’
City experts said the high oil price was being driven by speculators who, having had a role in the mortgage crisis, have now become active in the oil and gas market.
Some 45 per cent of new car sales are diesels. They have grown in popularity because of their traditionally better fuel economy – until the mid-1990s diesel was cheaper than petrol – and now lower CO2 emissions which mean lower road tax.
But the widening gap as diesel becomes ever more expensive means those benefits are being wiped out.
Since early last week, the price of petrol has risen 1.73p a litre while diesel has gone up 2.66p.
The average pump price of petrol has risen 4.49p a litre in the last month, to 112.55p a litre in the middle of this month. Even in the few days since those sums were calculated, it has risen to 113.34p.
Motorists in many areas are paying far in excess of the average price. The price-comparison website PetrolPrices.com said some motorists are paying 137p a litre for diesel and 124.9p for unleaded.
Low-paid but essential car users – such as community workers and district nurses – are out of pocket because Government-approved mileage allowances of 40p a mile for the first 10,000 miles and 25p thereafter are failing to keep pace. If employers do pay more, the employees are taxed.
AA president Edmund King said: ‘The finger of blame for soaring oil prices is being pointed at market speculators.
‘Prices have doubled since last year and this is not just due to strong demand from China and other nations.
‘While huge profits are made in the financial centres, car owners are becoming desperate and firms are suffering.’
The hauliers’ campaign group Transaction is to repeat last month’s protest in Park Lane. Spokesman Mike Presniell, of Kent, said: ‘Costs are escalating, firms are going out of business, and thousands of jobs are being lost.
‘Gordon Brown has to act to cut the duty or give us an essential users’ rebate.’
The Road Haulage Association is to hold a mass lobby of Parliament. It said a typical articulated truck that cost £35,000 a year to fuel a year ago now costs £49,000.
Hauliers are being warned of a 6p increase in the next seven days, which would take the annual bill to £52,000. They say fuel represents over 40 per cent of their costs, which will mean higher prices in the shops.
RHA chief executive Roger King said: ‘The industry cannot possibly absorb the impact of surging oil prices. Only the Government is gaining from these increases.’